Dimond v Lovell

JurisdictionEngland & Wales
JudgeTHE VICE-CHANCELLOR,THE RT. HON. LORD JUSTICE THORPE,THE RT. HON. LORD JUSTICE JUDGE
Judgment Date29 April 1999
Judgment citation (vLex)[1999] EWCA Civ J0429-24
Docket NumberCCRTF 98/1003/CMS2
CourtCourt of Appeal (Civil Division)
Date29 April 1999
Vanessa Dawn Dimond
Claimant/Respondent
and
R J Lovell
Defendant/Appellant

[1999] EWCA Civ J0429-24

Before:

The Vice-chancellor: The Rt Hon Sir Richard Scott

Lord Justice Thorpe

Lord Justice Judge

CCRTF 98/1003/CMS2

IN THE SUPREME COURT OF JUDICATURE

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM SHEFFIELD COUNTY COURT

(MR RECORDER ANTON LODGE QC)

Royal Courts of Justice

Strand

London WC2

MR IAN MCLAREN QC & MR STEVEN TURNER (Instructed by Nelson & Co., Leeds, LS3 1LF) appeared on behalf of the Appellant

MR DANIEL BRENNAN QC & MR MARC WILLEMS (Instructed by Cotrill Stone Lawless, Manchester, M2 5WA) appeared on behalf of the Respondent

THE VICE-CHANCELLOR
1

The facts of this case are very simple and the sum involved is trivial. But the case raises issues of considerable importance and some difficulty. Other cases, we are told, are queuing up in county courts around the country awaiting the result of this appeal. There are cases in this Court, too, awaiting the result.

2

The case arose out of a road traffic accident in Sheffield on 30 December 1996. Mrs Dimond, respondent in this Court and the plaintiff below, was driving her motor vehicle, a Suzuki Vitari, when the appellant, Mr Lovell, drove his car into the back of hers. She did not suffer any physical injury but her vehicle was damaged. It was still capable of being driven and, for about three weeks or so, she continued to drive it. It then went into the garage for repairs. Mrs Dimond was a bank manager. She needed a car to drive to and from work. I expect she needed a car also for social activities. So arrangements had to be made for her to obtain a replacement vehicle. Her husband after the accident had consulted insurance brokers about the recovery of damages. The insurance brokers advised him of the replacement vehicle services on offer from 1st Automotive Ltd.

3

1st Automotive Ltd specialise in hiring replacement vehicles to individuals whose cars, without any fault on their part, have been damaged by the negligence of other drivers and are off the road while being repaired. A particular feature of the services provided by 1st Automotive is that a customer can postpone paying for the hiring until his or her damages claim against the driver of the other vehicle has concluded. Since 1st Automotive takes on only those who appear to have cast iron negligence cases with no element of contributory negligence, 1st Automotive has a very high recovery rate of, according to the evidence, 97 per cent. The form of agreement into which 1st Automotive requires its customers to enter entitles 1st Automotive to have the conduct of any litigation that may be necessary in order to recover the damages. One of the main advantages that an agreement with 1st Automotive offers is that the customer obtains not only a suitable replacement vehicle while his or her damaged vehicle is being repaired, but obtains also relief from the nuisance of having to make and pursue the damages claim. The replacement vehicle can be delivered to the customer. When the customer's car is roadworthy again, the replacement vehicle can be left at the customer's garage for collection by 1st Automotive. The customer has to pay nothing until the conclusion of the damages claim when, if all has gone well, 1st Automotive's charges will be covered by the damages recovered from the negligent driver.

4

In reality, of course, the recovery will not be from the negligent driver. It will be from the negligent driver's insurers. This present litigation appears to be litigation between Mrs Dimond and Mr Lovell. In reality it is litigation between 1st Automotive and Co-operative Insurance Society Ltd, Mr Lovell's insurers. I will refer to them as 'CIS'.

5

Mrs Dimond was happy to sign 1st Automotive's form of agreement. She knew she needed a replacement vehicle while hers was being repaired. She made no enquiries as to whether other companies might be able to supply her with a suitable replacement vehicle at a lower rate of charge than 1st Automotive was offering. She, or more likely her husband, simply accepted their broker's recommendation that she should deal with 1st Automotive.

6

She signed the 1st Automotive agreement on 25 January 1997. A Ford Mondeo was the replacement vehicle. The date on which the vehicle was to be returned was left open. It was not known exactly when her Suzuki would be ready. The details of the charges to be made were not specified in the agreement. Miss Christine Smith, a director of 1st Automotive, gave evidence that the rate of charge could not be specified until it was known for how long the hiring had continued. The reason she gave for this was that 1st Automotive's daily rate of charge reduced after the first seven days. In addition a charge of £5 per day was made by 1st Automotive for a "Collision Damage Waiver". This rate of charge could have been but was not specified in the agreement before it was signed. 1st Automotive makes a delivery charge of £15. This, too, could have been but was not specified in the agreement before it was signed. No details whatever of the charges were inserted into the appropriate places in the agreement before it was signed by Mrs Dimond.

7

Mrs Dimond's Suzuki was repaired and ready for collection from her garage by 1 February 1997. So her hiring of the Ford Mondeo lasted 8 days. She duly returned the vehicle to her garage from where it was collected by 1st Automotive. 1st Automotive then entered the details of the applicable charges into the appropriate places in the agreement that Mrs Dimond had signed. The hiring charge was £30 per day for 8 days, £240. The delivery charge of £15 and the CDW charge of £5 a day for 8 days were added. So the charges entered in the agreement totalled £295.00. With VAT the total amount shown due to 1st Automotive was £346.63.

8

The £346.63 was the sum that 1st Automotive set about endeavouring to recover, in Mrs Dimond's name, from CIS. CIS paid Mrs Dimond the cost of the repairs to the Suzuki within three days of the bill for the repairs being presented to them. But they drew the line at the £346.63. So proceedings were commenced and the claim for £346.63 came before Mr Recorder Anton Lodge Q.C., sitting in the Sheffield County Court.

9

There were two lines of defence. The first was that under the agreement between Mrs Dimond and 1st Automotive, 1st Automotive provided Mrs Dimond with credit in that she was able to defer payment for the car hire until her damages claim had concluded. Accordingly, it was argued, the agreement was a regulated consumer credit agreement for the purposes of the Consumer Credit Act 1974 and, since the prescribed requirements of the Act had not been complied with, the agreement was unenforceable against Mrs Dimond. So, it was argued, she had had the use of a replacement vehicle without having any obligation to pay for it. Since she did not owe 1st Automotive the £346.63, or any other sum, for her hire of the Ford Mondeo, she could not recover that sum as damages from Mr Lovell. Mrs Dimond's (or rather 1st Automotive's) response to this was that the agreement was not a consumer credit agreement as defined by the 1974 Act, but if it was and if, in consequence, it was unenforceable, nonetheless Mrs Dimond's right to claim damages for the loss of use of her Suzuki for 8 days remained.

10

The second line of defence was that Mrs Dimond had failed to mitigate her damage. 1st Automotive's charge for the 8 days represented a daily charge of £43.33, inclusive of everything. The "spot rate" for car hire in the Sheffield area for 8 days varied between £27.42 and £23.89, depending on the age of the car. In simply accepting 1st Automotive's rates without any inquiry as to comparative rates on offer by other companies, Mrs Dimond had failed to act reasonably vis-à-vis the defendant from whom she expected to recover the charges. Moreover the services provided by 1st Automotive to Mrs Dimond for the £43.33 per day went beyond simply the supply of a car for hire and included advantages which could not in law form part of her damages claim. Mrs Dimond's response was that she had acted reasonably in all the circumstances in contracting with 1st Automotive and that their charges were reasonable.

11

The Recorder agreed with Mrs Dimond on each of the issues I have mentioned. He held that the agreement was not caught by the 1974 Act but that, even if it was and was unenforceable, Mrs Dimond could still recover as damages the cost of hiring a replacement vehicle. He held, also, that Mrs Dimond had acted reasonably in entering into the agreement with 1st Automotive and that 1st Automotive's rates were reasonable. He gave judgment in Mrs Dimond's favour for the £346.63 and a further £30 as to which no issue now arises.

12

Mr Lovell, by CIS, has appealed. The argument before us has been much the same as it was before the Recorder. There are three issues of principle.

13

First, are agreements such as those 1st Automotive offers its customers consumer credit agreements for the purposes of the Consumer Credit Act 1974? If the answer is 'Yes', a further issue arises as to the enforceability of the agreements.

14

Second, can a plaintiff such as Mrs Dimond recover damages for the loss of use of her vehicle notwithstanding that she has had the use of a replacement vehicle provided by a car hire company under an unenforceable agreement? If a plaintiff has had the use of a replacement vehicle without having to pay for it, can the plaintiff nonetheless recover damages?

15

Third, can a car owner whose car has been involved in an accident caused by negligence of another driver and without any fault on his own part accept the deal being offered by a company like 1st Automotive and recover...

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